Northern territory payroll tax: the highest threshold in the country
At $2.5 million, the NT threshold is double Victoria's and the highest in Australia — which means a great many Territory employers have no payroll tax liability at all. The catch is a fast taper and, from 1 July 2026, a new top rate for very large employers.
Payroll tax turns on your own circumstances — grouping, interstate wages, contractor arrangements and exemptions all change the answer. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Quick summary
- Threshold: $2.5 million in annual Australian taxable wages (about $208,333 a month).
- Rate: 5.5%, rising to 6.5% for $100 million or more.
- Threshold treatment: The threshold reduces by $1 for every $4 of Australian taxable wages above $2.5 million, reaching nil at $7.5 million.
- Administered by: Territory Revenue Office.
Verified against Territory Revenue Office on 24 August 2026. Current settings effective from 1 July 2026.
$2.5 million, then a fast taper
The Northern Territory exempts the first $2.5 million of Australian taxable wages — the most generous threshold in the country, and enough that most Territory small and mid-sized businesses never register.
What offsets it is the taper. The threshold reduces by $1 for every $4 of Australian taxable wages above $2.5 million, reaching nil at $7.5 million. That is a much faster withdrawal than Queensland's $1-in-$7 or Western Australia's gradual phase-out, so the effective marginal rate through the $2.5m–$7.5m band is substantially above the 5.5% headline.
From 1 July 2026 a new rate of 6.5% applies to employers and groups with Australia-wide wages of $100 million or more. The amendment deliberately left the $2.5 million threshold, the deduction settings and the general 5.5% rate untouched for everyone else — so for the vast majority of Territory employers nothing changed.
What counts as wages
Broader than base pay. Taxable wages include:
- Salary, wages, overtime, penalty rates and loadings
- Commissions, bonuses and allowances beyond the exempt rates
- Superannuation contributions, including salary sacrifice
- Fringe benefits at their grossed-up value, and termination payments
- Payments to some contractors, where the contract provisions deem them wages
The contractor limb generates most assessments. A worker treated as a contractor for income tax can still be caught for payroll tax — and the underlying classification carries consequences well beyond this tax, as contractor and labour-hire obligations covers.
Grouping and interstate wages
Two rules catch employers who believe they are under the threshold. Grouping combines related businesses so they share one threshold rather than one each. And the threshold test uses your Australian taxable wages, not your the NT wages — so a national employer with a small the NT presence can be liable here on the strength of its interstate payroll, with the NT taxing its share and pro-rating the deduction.
Registering and lodging
Register with Territory Revenue Office once you cross the threshold. Returns are generally monthly with an annual reconciliation, and the safest habit is to lodge a nil return rather than skip a period — missed returns attract interest whether or not tax was owing.
How the NT compares
Payroll tax is a state tax, so there are eight different answers. Worth knowing in full if you employ across borders or are choosing where to open a second site.
| Jurisdiction | Annual threshold | Monthly | Headline rate |
|---|---|---|---|
| New South Wales | $1.2 million | $101,918 | 5.45% |
| Victoria | $1 million | $83,333 | 4.85% |
| Queensland | $1.3 million | $108,333 | 4.75% – 4.95% |
| Western Australia | $1 million | $83,333 | 5.5% |
| South Australia | $1.5 million | $125,000 | 4.95% |
| Tasmania | $1.25 million | Pro-rated by days | 4% – 6.1% |
| Northern Territory | $2.5 million | $208,333 | 5.5% – 6.5% |
| Australian Capital Territory | $1.75 million | $145,833 | 6.85% – 8.75% |
Each row is maintained in one place and carries its own source link and verification date. The same figures are published as an open dataset at /data/payroll-tax/thresholds.csv.
Common mistakes
- Reading the $2.5 million threshold as a permanent exemption. It withdraws at $1 for every $4 above, and is gone entirely at $7.5 million.
- Testing NT wages instead of Australian wages. The threshold test is national even though the tax is territorial.
- Leaving super and fringe benefits out of the wage base. Both are taxable wages.
- Ignoring grouping. Related entities share one threshold, not one each.
Payroll tax starts with an accurate wage base
Every figure here depends on knowing what you actually paid, including overtime, penalty rates and allowances. RosterElf applies award rates to approved timesheets and feeds them to Xero or MYOB, so the wages you report are the wages you paid.
Start free trialGeneral information only, not tax advice. Payroll tax turns on your own circumstances — grouping, interstate wages, contractor arrangements and exemptions all change the answer. Verify with Territory Revenue Office and take advice for your situation.
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Northern Territory payroll tax FAQ
- $2.5 million in annual Australian taxable wages, or about $208,333 a month. The threshold reduces by $1 for every $4 of Australian taxable wages above $2.5 million, reaching nil at $7.5 million. Below the threshold you have no liability and nothing to lodge.
- 5.5%, rising to 6.5% for employers paying $100 million or more, applied to the NT share of taxable wages. Rates and thresholds are set independently by each state and territory — the comparison table on this page covers all eight.
- Possibly. The threshold test uses your Australian taxable wages, so an interstate business with Territory employees can be liable in the NT even where its NT wages alone are modest — the national figure decides whether you are over $2.5 million, and the Territory then taxes its share with a proportionate deduction. This catches national employers with a small Darwin or Alice Springs presence.